Preparing for the Fair Work Agency  and How Software Can Help

From 2026, the Fair Work Agency (FWA) will introduce significant changes to the employment landscape. Unlike previous systems, workers will not always need to bring claims themselves. The FWA will have the power to act proactively, inspect workplaces, review records, and require information. This represents a major shift in employer responsibilities, particularly for SMEs without robust HR and compliance systems.

Effectively, this is about proving your business is consistent, compliant, and fair. The following guide outlines what the FWA will do, the risks for employers, and practical steps to prepare.

What the Fair Work Agency Will Do

The FWA is designed to promote fair and consistent workplace practices and provide guidance on work structure, pay, and employee rights. While it is not a traditional enforcement body, inspections and intervention will be a key part of how standards are assessed, particularly where complaints or concerns arise.

The Agency will have powers to:

• Issue notices of underpayment for National Minimum Wage, Statutory Sick Pay (SSP), and holiday pay
• Require payment of arrears within a short timeframe (around 28 days)
• Impose financial penalties up to 200% of the underpayment, capped at £20,000 per worker, payable to the Secretary of State
• Recover enforcement costs from non-compliant employers (subject to further regulations)

Practical impact: Employers could face repayment demands, penalties, and additional costs even without an employee making a tribunal claim.

What Inspections Will Focus On

FWA inspections will assess evidence, not intention. Employers will need to demonstrate:

• Clear absence and holiday records
• Consistent application of SSP
• Accurate payroll data
• A reliable audit trail
• Written risk assessments
• Up-to-date policies and procedures
• Evidence that managers have received training

Inspections may not be scheduled in advance, so these standards must be embedded in day-to-day operations.

Tip: HR software with audit and compliance features, such as oneHR, can track training, policies, and holiday and absence records, creating a ready-made evidence trail.

High-Risk Areas for Employers

Certain issues repeatedly create exposure:

• Misuse of zero-hours contracts
• Misclassification of workers
• Inconsistent treatment between employees
• Poor or missing documentation
• No clear reporting or escalation process

For subcontractors or third-party workers, businesses must maintain a clear audit trail showing:

• Who is carrying out the work
• On what basis
• How they are being treated
• Checks and oversight undertaken

HR tools tip: HR software can centralise contracts and documentation, roles, and compliance checks to reduce risk.

What Employers Will Be Expected to Show

1. Consistency and Transparency

• Clear reasoning behind decisions
• Consistent treatment across the workforce
• Documented processes, not informal practices

2. A Safe Working Environment

• Practical safety measures
• Clear responsibilities and roles
• Up-to-date risk assessments

3. Training That’s Actually Delivered

• Harassment prevention
• Equality and inclusion
• Manager training
• Records proving completion

4. Proper Processes

• Disciplinary and grievance procedures aligned with ACAS guidance
• Managers trained to apply them consistently
• Outcomes properly documented

5. Pay and Working Time Accuracy

• Correct holiday pay, overtime, and breaks
• Reliable time-tracking and payroll systems
• Transparent pay calculations

6. Contracts and Policies

• Up-to-date wording
• Clear and fair terms
• Alignment with current legislation and expectations

How software can help: Our HR and H&S software can support you in many ways. Some include:

• Training Matrix – keep track of training completed and training identified with our training matrix feature, which enables you to capture HR and H&S training needs, set training reminders, and track key dates and certifications related to manager and employee training.
• Documentation Store & E-Signatures – store all contracts and policies directly on oneHR and request e-signatures to confirm employee acknowledgement. Making them easily accessible and providing an accurate audit trail.
• Key Health & Safety Contacts – assign users key health and safety roles such as Competent Person, First Aider, Mental Health First Aider, and Fire Marshals to provide clarity on responsibilities.

Steps Employers Should Take Now

Preparation is key. Don’t wait until the FWA is in force. Recommended actions include:

• Conduct a full audit of current practices, policies, and contracts
• Address gaps in documentation and record-keeping
• Train managers to apply policies consistently
• Review payroll, absences, and SSP calculations
• Implement HR software to centralise evidence, streamline audits, and provide reporting

By taking these steps now, businesses can reduce risk, ensure compliance, and protect themselves from potential penalties.

The FWA reforms are not about adding unnecessary admin. They are about demonstrating that your business is run fairly and consistently. Clear processes, thorough documentation, and consistent application of policies will place employers in a strong position. Without them, risks are exposed, and the consequences can be significant.

Investing in proper systems, training, and HR software today ensures your business is ready, resilient, and compliant when the FWA begins operations.

Book a demo to see how oneHR can help to prepare for the Fair Work Agency.

Call: 0330 107 1037

Email: contact@onehrsoftware.com